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Primecorp closes largest investment sale to Conundrum Capital

A LARGE PORTFOLIO of suburban Ottawa industrial and office properties has been sold for $42.5 million, one of the largest deals of its kind in recent years.

Conundrum Capital Corporation of Toronto acquired the entire portfolio of Commerce City Properties in a deal that closed last week. The owners decided to divest their entire holdings to capitalize on the strong market in all real estate sectors, says Aik Aliferis, principal/broker with Primecorp Commercial Realty, which handled the sale.

The Commerce City portfolio consists of 12 buildings and three industrial condominiums. It includes four multi-tenant office/industrial/warehouse buildings on Canotek Road in the east end, seven similar properties in the Industrial Avenue and Russell Road area, a two-storey suburban office building at 2525 St. Laurent Blvd. and three industrial condos on Thurston Drive. The portfolio totals almost 400,000 square feet of space and attracted 11 qualified bidders.

“It was definitely within our sweet spot,” says Lorne Stephenson, senior vice-president of investment and strategic development with Conundrum Capital. The company owns property across Ontario, including about 750 apartment units in Ottawa.

The location, quality and strength of the portfolio were all positive factors, says Mr. Stephenson, who describes Ottawa as a “very good market”.

Primecorp recently completed the sale of another similar portfolio worth $50 million and is actively marketing a third that it expects will garner between $60 and $65 million.

Primecorp moved more than $350 million worth of commercial real estate across Canada in 2005. It sold Clarendon Lanes development in the ByWard Market to GWL Realty Advisors for $30.8 million, and brokered a $70 million deal between CAP REIT and Transglobe Property Management involving apartments in Toronto, Oakville, Burlington and London. It expects to surpass that level this year.

Primecorp was founded in 1998 by Mr. Aliferis along with partners Steve Lerner, Nicolas Pantieras and Sam Firestone. It now deals in all areas of commercial real estate.

Mr. Aliferis, Mr. Pantieras and Mr. Firestone handle commercial properties while Mr. Lerner specializes in retail transactions with some of Canada’s largest retailers including Loblaws and Wal-Mart. He is also the company’s land expert. Mr. Aliferis and Mr. Firestone also handle multi-unit residential sales.

Raffaele Guglielmelli recently joined the firm, expanding its expertise into health care. He specializes in retirement and long-term care homes, independent and assisted living facilities and similar properties.

“We’re competing for portfolio mandates against the big names on Bay Street”, says Mr. Pantieras, explaining that the company is able to compete successfully with real estate investment bankers.

The company has established relationships with most of the substantial real estate groups in Canada such as pension funds, REITs and Great West Life, says Mr. Aliferis. It has offices in Ottawa, Toronto and Montreal and affiliates in Halifax and Edmonton.

The company is currently marketing the Dymon Capital portfolio, consisting of 14 buildings totaling 417,000 square feet. It includes office buildings at 2781 Lancaster Road and 380 Hunt Club, industrial buildings on Stevenage Drive and Algoma Road and four retail plazas, among them Manotick Plaza at 5511 Main Street in Manotick and Richmond Square at 1299-1315 Richmond Road in Ottawa’s west end.

The portfolio is roughly 55 percent office, 29 percent industrial and 16 percent retail. There are approximately 110 tenants. ■